The Russian leader took George W. Bush by surprise when he made the proposal at the G8 summit in Germany following weeks of rising tensions over the programme.

Mr Putin said he had secured agreement from Azerbaijan to use the radar as part of a collaborative system that would protect Europe from incoming missiles.

If Washington accepted the proposal, he would not have to carry out his recent threat to retarget Russian missiles against Europe, Mr Putin said.

“This will make it unnecessary for us to place our offensive complexes along the border with Europe,” Mr Putin told reporters, standing beside his US counterpart.

Mr Bush described the proposal as “interesting” and said both sides had agreed to engage in “strategic dialogue” to “share ideas” over missile defence.

Stephen Hadley, US national security adviser, said the proposal demonstrated Russian willingness to engage in “real co-operation” on missile defence.

But the two sides were at odds over the potential role of the Azerbaijan radar. Mr Putin portrayed it as an alternative to a planned US facility in the Czech Republic that Russia opposes. But Mr Hadley said only that Azerbaijan could make a “contribution” to the broader system.

Pavel Felgenhauer, a defence analyst in Moscow, said the Gabala radar station involved in the proposal was not a suitable substitute for the Czech Republic as it was too close to Iran – one of the countries Washington says its missile shield is designed to defend against. It was also too far from the planned US interceptor base in Poland to be viable. “The Pentagon won’t want this at all,” he said. “The White House will not reject it out of hand, but I don’t forecast any agreement.”

US officials sought to portray the proposal as a breakthrough in efforts to secure Moscow’s backing for its missile shield and a first step towards serious negotiations about co-operation.

But it appeared highly unlikely that Washington would sacrifice its Czech base or put a key part of its missile shield in the hands of a former Soviet state.